Clock ticking on $2 billion hit to Navy shipbuilding

Washington - Navy shipbuilding and conversion funding would be cut by $2.14 billion in 2013 under so-called "sequestration," according to a nearly 400-page report released Friday afternoon by the White House Office of Management and Budget.

Sequestration refers to the $1.2 trillion in automatic, across-the-board spending cuts over a 10-year period that were mandated by the 2011 legislative deal to raise the federal debt ceiling. Friday's report, released by the White House a week late, was a response to a bill passed by Congress last month seeking more details on where these cuts would come from.

For 2013, the report projects cuts of nearly $55 billion each from both defense and nondefense spending. This amounts to a reduction of roughly 9.4 percent in most defense programs, and 8.2 percent in non-defense. The report contains line-by-line detail on the impact of sequestration on more than 1,200 budget accounts.

Whether these cuts could impact Electric Boat in Groton remains to be seen. But while the report did not provide details about how specific programs would be affected, it did list $1.8 billion in projected cuts to Navy research, development, test, and evaluation funding.

In addition to the two Virginia-class submarines produced by Electric Boat each year, which could be threatened by the shipbuilding cuts, the development of a replacement for the aging Ohio-class submarines could be affected by the cuts in research and development funding.

"The specter of harmful across-the-board cuts to defense and nondefense programs was intended to drive both sides to compromise," the introduction to the OMB sequestration report said. "The sequestration itself was never intended to be implemented."

But a congressional panel appointed under the 2011 deficit ceiling deal failed to reach agreement late last year on deficit cuts needed to head off sequestration. And, despite nearly unanimous calls from members of both parties for an alternative to sequestration, now less than four months away, there has been no perceptible progress on Capitol Hill toward reaching a consensus. Few expect such efforts to begin in earnest until after the November election, when Congress returns for a lame-duck session.

In the absence of serious negotiations, there has been no shortage of partisan finger-pointing.

"The report underscores the points I've been making for months about the need for a bipartisan, balanced solution as soon as possible to avoid the widespread impact of sequestration," Rep. Joe Courtney, D-Conn., said in a statement following the release of Friday's report. "Earlier today, Republican leadership announced a plan to scale back the congressional calendar for the fall. Addressing sequestration head-on is one of the countless reasons the House should still be session, working hard to stave off these cuts."

But Sen. Kelly Ayotte, R-N.H., who has been calling for action to head off the defense sequestration cuts, characterized Friday's report as "another example of the failure of President Obama to lead," and called the report "disappointing."

Added Ayotte: "…The nation cannot wait until after the election to begin to develop a sequestration alternative. Congress should not leave town until we have a bipartisan solution."

In turn, the Obama administration directed some harsh words at Congress in the introduction to Friday's report.

Emphasizing that the administration did not support sequestration cuts, which it described as "deeply destructive to national security, domestic investments, and core government functions," the report called on Congress to "act responsibly." Without directly mentioning names, it also took a swipe at congressional Republicans for favoring alternatives to sequestration that relied entirely on spending cuts without also considering increases in government revenues.